2024-11-02
October 30, at the WTA · Xianghu Dialogue 2024 in Sanya, Hainan, Mr. Clayton REID, Board Member of MMGY Global, delivered a keynote speech on "Global Tourism: The Economic, Consumer and Technology Future". Below is a summary of the key points discussed.
Examining the current global economy, signs of recession have emerged since the end of 2023. As of July this year, the U.S. consumer index dropped to a historic low, prompting significant efforts to stimulate economic activity. At the same time, China has also introduced a series of measures aimed at promoting the recovery and growth of the tourism industry. Looking ahead to the next two years, we anticipate continued economic growth across Asia, while economic performance in the U.S. and Latin America may remain relatively weak.
In response to these economic shifts, global tourism and leisure professionals are actively seeking new opportunities. Since the end of the pandemic, the travel and leisure market has rebounded sharply, with consumer demand rising steadily back to pre-crisis levels. This growth is propelling major leisure destinations worldwide to new heights. In Europe, for instance, there is a growing enthusiasm among Spanish and Italian travelers for exploring China.
In this new wave of opportunity, the aviation sector has been one of the first to sense market shifts. For instance, in the U.S., industry forecasts over the next 30 years predict that the constant growth in travel demand, along with increasingly frequent population migration, will spur more demand for air travel. The rise of emerging airlines and the opening of more routes is expected to improve connectivity, especially between smaller markets. United Airlines and American Airlines, for example, have been continuously expanding, with business levels close to pre-pandemic figures. Other nations should also fully recognize the growth opportunities emerging from the recovery of the travel market and work to enhance the convenience and quality of air travel experiences. However, to address the diverse travel preferences of tourists, we must also consider developing other transportation modes, such as train and car travel, to support sustainable, ongoing growth in the tourism sector.
In the long term, sustaining rapid growth in global tourism faces several challenges. One of the most pressing is the issue of debt. Tourism companies accumulated capital over many years, but the pandemic forced a significant depletion of these reserves, pushing debt levels to unprecedented heights. This is a clear signal that we must carefully reassess our strategies to tackle the challenges posed by rising debt. Additionally, safety concerns have become a major point of interest for travelers. Amid an increasingly complex international landscape, travelers are paying more attention to the safety of destinations, with concern over safety issues rising steadily.
The tourism market is also becoming more segmented. Those born around the 2000s show a strong interest in sustainable tourism, actively advocating for eco-conscious practices on social media to push the industry towards greater environmental responsibility. The 13-to-28-year-old Gen Z demographic, especially prominent in the Asia-Pacific region and particularly within mainland China, is anticipated to be a primary driver of future growth in tourism. Following closely behind is Generation Alpha, currently under the age of 12, though it is still too early to define the travel preferences of this group. Meanwhile, older travelers also continue to show a strong interest in travel, particularly in cruise vacations. Approximately 48% of global travelers express interest in cruising, with top destinations being Australia, Asia’s coastal regions, and the Mediterranean.
As we delve deeper into travelers’ concerns, it is clear that a growing number are placing increased emphasis on cost control. Many travelers now seek to minimize travel expenses, focusing more closely on affordability and staying within their financial limits. Data shows that 41% of global travelers now consider price as a top factor in their travel decisions, more so than in the past, indicating a shift away from luxury tourism. This shift will undoubtedly reshape the competitive landscape of the global tourism industry.
A remarkable 67% of travelers show high sensitivity to brands, and social media influencers play a pivotal role, influencing about one in four travel decisions. Yet, in today’s complex digital landscape, consumers face the challenge of discerning trustworthy travel recommendations. Additionally, artificial intelligence is gradually becoming more integrated into travel planning, particularly in business and corporate travel. Despite these advances, travelers increasingly express a preference for human customer service over impersonal AI or robotic interactions. Ultimately, we must collectively strive to foster a more inclusive tourism environment that aligns with traveler expectations and the evolving technological landscape.
Looking to the future, despite various challenges, the vision for the tourism industry remains bright and promising. By 2029, the global tourism market is projected to reach an impressive $18 trillion. I look forward to seeing the global tourism community join forces to turn this shared vision into a tangible reality.